Connecticut income tax: Tax exempt does not mean no tax filing

On Behalf of | Jul 20, 2018 | Income Tax

There a number of organizations in Connecticut and elsewhere that are considered tax-exempt. This means they do not have to meet the same tax standards as everyone else. While they may not have to pay income tax, this does not mean that they do not have to submit a tax filing every year. They do and failing to declare and disclose tax information can have significant consequences.

According to the Internal Revenue Service, all organizations that are considered tax-exempt have to file their tax returns in May instead of April. The forms they have to file are called 990 forms. There are several different kinds depending on the organization’s needs, gross receipts and organization type.

An organization that believes it meets tax-exempt status may file the 990 form even if they have not been officially granted exempt status yet. If they have not yet applied for this status, they can do so by filing the appropriate application. This must be done within 27 months after organization formation.

Tax-exempt filings must be submitted electronically and they must be submitted on time. Keeping good records can help if any questions are raised about the filing. Failure to file on time can result in an organization having to pay hefty fines. Failing to file at all can result in the loss of the tax exempt status. An experienced tax attorney can answer any questions tax-exempt organizations in Connecticut have regarding their tax filings and can offer further assistance in preventing or addressing any issues that may arise.